Sunday, April 15, 2012

Below is a copy of my submission on the Mixed Ownership Model Bill to the Finance and Expenditure select committee.

Submission

I oppose the
intent of this bill because the partial privatisation of the energy companies that
are the subject of the bill will result in a loss of wealth and control for New
Zealanders collectively.

I reccommend that this bill not proceed.

General comments

While I am
extremely concerned about the loss of wealth that will result from the partial
privatisation of these companies and the flawed economic reasoning that
underlies this bill, I wish to focus my submission on the loss of control, and
in particular the loss of control that will affect the protection of Māori
rights that are held under the Treaty of Waitangi.

The Treaty of
Waitangi reaffirms the right of Māori communities to exercise tino
rangatiratanga over their freshwater and geothermal resources. This includes
rights, and corresponding obligations, to protect, preserve, control, regulate,
use, and develop those resources. Māori have not willingly sold either their
tino rangatiratanga or control over freshwater and geothermal resources.

There must
not be a partial privatisation of any power generating State Owned Enterprises
(SOEs), or the passing of any new legislation for such a purpose until an
appropriate protection mechanism for Māori rights under the Treaty has been
negotiated and agreed with Māori.

The partial
sale of the power generating SOEs will make the prospect of securing section
27B resumption of any of the assets of the power generating companies highly
unlikely. Māori will continue to have no adequate redress for their freshwater
and geothermal claims and the pool of assets and range of potential remedies
practically available to Māori claimants will be reduced.

Simply
transporting the words of section 9 of the State Owned Enterprises Act 1987 into
the new legislation will not provide effective protection of Māori rights. Treaty obligations must continue to apply to
the companies themselves, no matter who the shareholders are, if the Crown is
to sell down its shareholding and its ability to exercise control over these
companies in a way that is consistent with Treaty principles.

In order to
effectively protect Māori rights and interests, any alternative formulation of
the Crown's obligations would need to recognise the following:

a. All available
land or interests in land which are used or have been used for or in connection
with the generation or transmission of hydro-electricity or geothermal
electricity and are memorialised under section 27B of the SOE Act 1986 should
be returned to Māori.

b. Māori require
compensation for past use of freshwater and geothermal resources, compensation
for loss or rights or the ability to profit from economic use of those
freshwater and geothermal resources (for example power production) and payment
for future use of the proprietary interest in those freshwater and geothermal
resources.

c. Amendments
need to be made to the Resource Management Act 1991 and any other relevant
legislation required to provide for future Māori rangatiratanga and control
over freshwater and geothermal resources.

Power
generating SOEs should be retained in Crown hands, and should not be
sold/privatised until such time as Māori claims are resolved or Māori otherwise
agree and are satisfied with the protections offered by the Crown.

I would also
like to register my objection to the process of consultation that has been
undertaken on the issue of the protection of Treaty of Waitangi rights. In short, it did not look like good faith
consultation – it was unnecessarily rushed with consultation hui over only a
week giving no time to discuss these important issues with whanau. It is unacceptable that there were no hui in
places like Taranaki or Te Tau Ihu. I do
not think that it met the standards
for consultation that are set out in the UN Declaration on the Rights of
Indigenous Peoples, which the Government claims to endorse.

Specific comments

As noted
above, I am opposed to the overall intent of this bill and recommend that it
does not proceed. However, should the
committee determine that the bill ought to proceed, I reccomend that clause 45Q
be amended for the reasons set out below.

Clause 45Q

I oppose this
clause because it waters down the protection of Treaty rights that currently
exists in relation to these energy companies by virtue of s 9 of the State
Owned Enterprises Act 1987. Currently,
the Crown has full ownership and control of these companies and a Treaty
principles provision that refers only to the Crown may be sufficient protection
under the existing arrangements.

However, in
selling down its shareholding, the Government is giving up some of its control
to third parties who have no Treaty obligations. In that situation it
will clearly be more difficult for the Government to fulfill its own
obligations. That transfer of shares and control should therefore be
completed in a way that is consistent with the principles of the Treaty.
Otherwise, the Government could keep selling down its shareholding in the
future and the Treaty principles provision would become virtually
worthless.

The
Government has argued that third parties cannot be subject to obligations under
the Treaty of Waitangi because those third parties are not party to the
Treaty. Yet, nobody is arguing that
other shareholders are a party to the Treaty, rather the argument is that the
Crown has obligations to act consistently with its Treaty obligations. If it is
going to divest itself of responsibilities (such as giving up full control of
State Owned Assets), then it needs to do so in a way that ensures rights under
the Treaty are protected. If this means
putting some constraints on third-party rights, then so be it. It does this already by requiring that
memorials be placed on the certificates of title of State Owned Enterprises
properties so that any future buyer is aware that such properties may be
compulsorily purchased if they are required to be used to settle Treaty
claims. This does not make anybody else
a party to the Treaty of Waitangi. It does
not bind non-Crown groups to Treaty provisions.
Third-parties’ rights would be affected by the legislation, not because
they have somehow become parties to the Treaty.

If it was
impossible for non-Crown parties to be required to act consistently with Treaty
principles, why does the Government think it is necessary to insert a clause
that stipulates “for the avoidance of doubt”, the Treaty provision in the new
legislation “does not apply to persons other than the Crown”? If it is not possible to bind “non-Crown
groups” there could be no doubt about the application of sub-clause 45Q(1).

I recommend that sub-clause 45Q(2) be omitted and clause 45Q be amended
to read:

“Nothing in this Part shall permit the Crown, Genesis Power Limited,
Meridian Energy Limited, Mighty River Power Limited, or Solid Energy New
Zealand Limited to act in a manner that is inconsistent with the principles of
the Treaty of Waitangi (Te Tiriti o Waitangi).”

Recommendations

For the
reasons set out above, I recommend that this bill not proceed.

In the alternative, should the committee
determine that this bill ought to proceed, I recommend that clause 45Q be
amended as described above.

Ahi-kā-roa

Ahi-kā-roa literally means "the long-burning fires". It is a Māori concept that encapsulates the idea that decision-making authority and rights associated with land are maintained through the connection to that land and the fulfillment of obligations in relation to it.

About Me

I am of Ngāti Kahungunu and Te Aitanga-a-Māhaki descent. I am a lecturer at the Faculty of Law, Victoria University of Wellington. My primary research interests relate to the Treaty of Waitangi and indigenous legal traditions. Before joining the faculty in 2006, I worked in a number of different roles at the Waitangi Tribunal, Māori Land Court, and the Office of Treaty Settlements. I have recently completed a PhD through the University of Victoria, British Columbia. My dissertation is entitled 'The Treaty of Waitangi Settlement Process in Māori Legal History'. I am the Co-Editor of the Māori Law Review